INTELLIGENT HIGHWAY SOLUTIONS, INC. (OTCMKTS:IHSI) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

Our Board of Directors has concluded, based upon advice supplied us, previously issued financial statement(s), for which this Registrant is required to provide financial statements under Regulation S-X (17 CFR 210) should not be relied upon. You are advised that you should not rely upon the referenced statements and notes for the reasons below, with respect to our conclusion that Crescent cannot be considered consolidated for accounting purposes.

The statements and or notes were contained in:

our Form 10-K filing for the fiscal year ended December 31, 2016, and

our Form 10-Q filings for the quarterly periods ended: March 31, 2017, for the quarterly period ended June 30, 2017, for the quarterly period ended September 30, 2017, for the quarterly period ended September 30, 2016, and for the quarterly period ended June 30, 2016

As explained herein, this conclusion regarding the non-reliance was reached on or about November 1, 2018.

We discussed the subject matter with our auditing firm. As more detailed in the below section, Background, the Registrant previously disclosed the acquisition of Crescent, and related litigation with a lender, TCA.

Background

On March 13, 2017, the Registrant, Intelligent Highway Solutions, Inc., (IHSI) confirmed the partial completion of a closing involving a certain acquisition and certain related credit facilities, such closing referenced by the parties as the Intelligent Highway Solutions, Inc. – Crescent Construction Company Inc. Purchase (the “Transaction”).

In summary, a company acquired ownership of the acquisition, and also provided the Registrant rights to take control of the ownership of the acquired company, and another company agreed to fund the acquisition and certain working capital, to allow the completion of the overall Transaction.

Reference is made to the Registrant’s Form 8-K filed in March, 2017, concerning the March 21, 2017 event of the acquisition. Reference is also made to the Amendment filing on or about March 12, 2018, where the Registrant determined, upon advice of advisors and in light of comments supplied the Registrant in communications with the SEC, to file an amendment.

The litigation with TCA regarding Crescent continues in court, with the Registrant as the Plaintiff, in South Florida. Unfortunately, TCA has not filed an Answer to the claims as of this date, and it is believed TCA continues to assert that it owns and or controls Crescent and or assets of Crescent.

The records of Crescent, otherwise needed for such things as completing financial statements, completing audits, among other things, remain in limbo given the lack of settlement with TCA and lack of court order to the contrary. The Registrant believes it owns and controls Cresent but in light of litigation and lack of cooperation from TCA it is unable to complete or control Cresent as an asset.

About INTELLIGENT HIGHWAY SOLUTIONS, INC. (OTCMKTS:IHSI)

Intelligent Highway Solutions, Inc. is a technology-based intelligent highway solutions contractor. The Company’s primary focus is in the California transportation market providing services that range from providing labor, materials and related equipment for corrective service and maintenance services for the state’s transportation infrastructure. It intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs and other elements to become intelligent by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The Company is a distributor of products of SCS Lighting Solutions Inc. (SCS). The SCS products include standard lighting solutions, as well as custom lighting products for indoor and outdoor applications. It intends to develop ITS, which includes a range of applications, such as intelligent traffic signal management, video analytics, and information and alerts.